This Article shall be known as the First One-Half Cent (1/2¢)
Local Government Sales and Use Tax Act. (1983, c. 908,
s. 1; 2002-123, s. 8(b).)

§ 105-481. Purpose and intent.

It is the purpose of this Article to afford the counties and
cities of this State an opportunity to obtain an added source of revenue with
which to meet their growing financial needs, and to reduce their reliance on
other revenues, such as the property tax, by providing all counties of the
State that are subject to this Article with authority to levy one-half percent
(1/2%) sales and use taxes. (1983,
c. 908, s. 1.)

§ 105-482. Limitations.

This Article applies only to counties that levy one percent
(1%) sales and use taxes under Article 39 of this Chapter or under Chapter 1096
of the 1967 Session Laws. (1983, c. 908, s. 1; 1993,
c. 485, s. 25.)

§ 105-483. Levy and collection of additional taxes.

Any county subject to this Article may levy one-half
percent (1/2%) local sales and use taxes in addition to any other State and
local sales and use taxes levied pursuant to law. Except as provided in this
Article, the adoption, levy, collection, distribution, administration, and
repeal of these additional taxes shall be in accordance with Article 39 of this
Chapter. In applying the provisions of Article 39 of this Chapter to this
Article, references to "this Article" mean Article 40 of this
Chapter. The exemption for building materials in G.S. 105-468.1 does not apply
to taxes levied under this Article. (1983, c. 908, s.
1; 1993, c. 485, s. 26.)

§ 105-484. Form of ballot.

(a) The form of the question to be presented on a
ballot for a special election concerning the additional taxes authorized by
this Article shall be: "FOR additional one-half percent (1/2%) local sales
and use taxes" or "AGAINST additional one-half percent (1/2%) local
sales and use taxes."

(b) The form of the question to be presented on a
ballot for a special election concerning the repeal of any additional taxes
levied pursuant to this Article shall be: "FOR repeal of the additional
one-half percent (1/2%) local sales and use taxes" or "AGAINST repeal
of the additional one-half percent (1/2%) local sales and use taxes." (1983, c. 908, s. 1.)

§ 105-485: Repealed by Session Laws 1991, c. 689, s. 318.

§ 105-486. Distribution of additional taxes.

(a) County Allocation. - The Secretary shall, on a
monthly basis, allocate the net proceeds of the additional one-half percent
(1/2%) sales and use taxes levied under this Article to the taxing counties on
a per capita basis according to the most recent annual population estimates
certified to the Secretary by the State Budget Officer.

(b) Adjustment. - The Secretary shall then adjust the
amount allocated to each county under subsection (a) by multiplying the amount
by the appropriate adjustment factor set out in the table below. If, after
applying the adjustment factors, the resulting total of the amounts allocated
is greater or lesser than the net proceeds to be distributed, the amount
allocated to each county shall be proportionally adjusted to eliminate the
excess or shortage.

(c) Distribution Between Counties and Cities. - The
amount allocated to each taxing county shall then be divided among the county
and its municipalities in accordance with the method by which the one percent
(1%) sales and use taxes levied in that county pursuant to Article 39 of this
Chapter or Chapter 1096 of the 1967 Session Laws are distributed.

(d) No municipality may receive any funds under this
section if it was incorporated with an effective date of on or after January 1,
2000, and is disqualified from receiving funds under G.S. 136-41.2. No
municipality may receive any funds under this section, incorporated with an
effective date on or after January 1, 2000, unless a majority of the mileage of
its streets are open to the public. The previous sentence becomes effective
with respect to distribution of funds on or after July 1, 1999. (1983, c. 908, s. 1; 1985 (Reg. Sess., 1986), c. 906, s. 2;
1987, c. 832, s. 6; 1987 (Reg. Sess., 1988), c. 1082, s. 2; 1999-458, s. 7;
2001-427, s. 13(b), (c).)

§ 105-487. Use of additional tax revenue by counties.

(a) Except as provided in subsection (c), forty
percent (40%) of the revenue received by a county from additional one-half
percent (1/2%) sales and use taxes levied under this Article during the first
five fiscal years in which the additional taxes are in effect in the county and
thirty percent (30%) of the revenue received by a county from these taxes
after the first five fiscal years in which the taxes are in effect in the
county may be used by the county only for public school capital outlay purposes
as defined in G.S. 115C-426(f) or to retire any indebtedness incurred by the
county for these purposes.

(c) The Local Government Commission may, upon petition
by a county, authorize the county to use part or all its tax revenue, otherwise
required by subsection (a) of this section to be used for public school capital
needs, for any lawful purpose. The petition shall be in the form of a
resolution adopted by the Board of County Commissioners and transmitted to the
Local Government Commission. The petition shall demonstrate that the county can
provide for its public school capital needs without restricting the use of part
or all of the designated amount of the additional one-half percent (½%) sales
and use tax revenue for that purpose.

In making its decision, the Local Government Commission shall
consider information contained in the petition concerning not only the public
school capital needs, but also the other capital needs of the petitioning
county. The Commission may also consider information from sources other than
the petition. The Commission shall issue a written decision on each petition
stating the findings of the Commission concerning the public school capital
needs of the petitioning county and the percentage of revenue otherwise
restricted by subsection (a) of this section that may be used by the
petitioning county for any lawful purpose.

Decisions of the Commission allowing counties to use a
percentage of their tax revenue that would otherwise be restricted under
subsection (a) of this section for any lawful purpose are final and shall
continue in effect until the restrictions imposed by that subsection expire. A
county whose petition is denied, in whole or in part, by the Commission may
subsequently submit a new petition to the Commission.

(d) For purposes of determining the number of fiscal
years in which one-half percent (½%) sales and use taxes levied under this
Article have been in effect in a county, these taxes are considered to be in
effect only from the effective date of the levy of these taxes and are
considered to be in effect for a full fiscal year during the first year in
which these taxes were in effect, regardless of the number of months in that
year in which the taxes were actually in effect.

(e) A county may expend part or all of the revenue
restricted for public school capital needs pursuant to subsection (a) of this
section in the fiscal year in which the revenue is received, or the county may
place part or all of this revenue in a capital reserve fund and shall
specifically identify this revenue in accordance with Chapter 159 of the
General Statutes. (1983, c. 908, s. 1; 1993, c. 255,
ss. 1, 3; 1998-98, s. 31; 1998-186, s. 1; 2009-395, s. 1.)